UK and International Tax news

US Suspends Tariffs In Section 301 DST Investigations

Tuesday 8th June 2021

The US Trade Representative has announced the suspension of tariffs in section 301 Digital Services Taxes investigations which were started a year ago.

In June 2020, the USTR announced investigations into digital services taxes that had been adopted or were being considered by 10 of the US’s trading partners, including Austria, Brazil, the Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey, and the UK.  The investigations were conducted under s.301 of the 1974 Trade Act which gives the USTR broad authority to investigate and respond to a foreign country’s action which may be unfair or discriminatory and negatively affect US commerce.

In January 2021, the USTR determined that the DSTs adopted by Austria, India, Italy, Spain, Turkey, and the UK discriminated against U.S. digital companies, were inconsistent with principles of international taxation, and burdened U.S. companies. In March 2021, the USTR proposed trade actions in these six investigations, and undertook a public notice and comment process, during which it collected hundreds of public comments and held seven public hearings.  The USTR also terminated the remaining four investigations into Brazil, the Czech Republic, the European Union, and Indonesia because those jurisdictions had not implemented the DSTs under consideration.

The USTR’s latest announcement follows the conclusion of the DST investigations with final determinations in those investigations to impose additional tariffs on certain goods from those countries, while suspending the tariffs for up to 180 days to provide additional time to complete the ongoing multilateral negotiations on international taxation at the OECD and in the G20 process.

At the weekend, G7 finance ministers held a two day summit in London to discuss a range of issues including international taxation and digital services taxes.  More details of this are included in a separate international tax news item.


If you would like more detail on the above, including OECD’s approach to a DST, please contact Keith Rushen on 0207 486 2378.

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